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GameStop Corp (NYSE: GME) opened more than 15% down on Thursday after announcing plans of raising $1.75 billion through a convertible notes offering to potentially expand its BTC holdings.

According to the gaming merchandise retailer, net proceeds from the said offering will be used for general corporate purposes, “including making investments in a manner consistent with GME’s investment policy.”

And adding cryptocurrencies, especially Bitcoin, to the balance sheet has been a key component of the company’s investment policy this year.

In May, it spent around half a billion dollars to load up on 4,710 BTC.

Despite today’s decline, GME shares are up more than 10% versus their year-to-date low in April.

Why isn’t the Bitcoin strategy helping GameStop stock?

A significant pullback in GameStop stock this morning suggests the company’s Bitcoin strategy is failing to excite investors the way it does those invested in MicroStrategy.

Part of the reason could be that MSTR started buying BTC when it was trading at less than $12,000.

In comparison, GME is loading up on the world’s largest cryptocurrency by market cap when it already sits near all-time highs of $111,000.

For investors, this may be concerning since buying Bitcoin at an already elevated price could mean a significantly muted return than what MicroStrategy has been able to generate for its shareholders in recent years.

Note that GameStop shares do not currently pay a dividend to incentivize ownership, either.   

Wedbush says GME’s crypto strategy makes no sense

According to Wedbush analyst Michael Pachter, the company that’s often referred to as the original meme stock lacks a clear strategy to revitalise its core video game business.

Still, GME shares continue to thrive due to “the existence of greater fools willing to pay more than twice its asset value for its shares.”

In his research note to clients, Pachter went on to argue that GameStop’s crypto strategy doesn’t make sense in the first place, given it’s “already trading at 2.4x cash, making it unlikely that converting more cash to crypto will drive an even greater premium.”

Considering fundamentals and valuation metrics tied to GME stock, investors are better off parking their capital directly in Bitcoin or a BTC exchange-traded fund (ETF), he concluded.

Should you invest in GME shares today?

GameStop stock remains unattractive also because it recently reported a year-over-year decline in net sales for its first quarter.

The gaming merchandise retailer generated about $732 million in net sales, down significantly from $882 million in the same quarter last year.

Investors should also note that not a lot of Wall Street analysts cover GME shares anymore.

Those who do, on average, have a sell rating on the NYSE-listed firm and find it fairly valued at about $13.50 in 2025.

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